There are two major announcements in this budget for the bullion industry, which is considered positive by the market participants.
1) Reduction in Duty on Gold and Silver from 15% to 6%
2) Changes in the capital gain tax rate in holding and selling gold in physical or digital form.
Gold gained 3% in the first half of the week to a record high of $2488 (Rs 74730) and then fell by 4% in the second half to close around $2400 (Rs 73000), creating a bearish “Inverted Hammer” candlestick pattern on weekly charts.
Gold gained bullish momentum and surged above $2400 (Rs 73000) on broad-based USD weakness. Technically Gold prices have given a bullish breakout of the triangular pattern and a weekly closing above it. This opens the door for extra gains towards the previous high of $2450 (Rs 75000) and more in the coming days if momentum builds on.
Gold is trading in a range with a descending triangle with lower highs and higher lows. The triangle is becoming narrower and narrower every week, so a breakout is imminent.
This week, gold prices have remained stable between $2300 and $2365. On an annual basis, gold prices are up 21% since the end of the second quarter of 2023. Inflation is not decreasing, geopolitical tensions are not reducing, and government deficits are increasing. This provides significant support for gold.
Following the announcement of higher-than-expected US PMI data, gold and silver erased all of their gains for the week on Friday. The report revealed that US manufacturing and services activity remained strong, implying that inflation and interest rates will continue high for longer.
The most important event this week was the FED meeting. As the Fed maintains hopes for at least one rate cut this year, precious metals investors consider the inflation picture. If Fed officials deviate from market expectations of a policy shift before the end of the year, US Treasury bond rates may rise, making it challenging for Gold to remain stable. On the other side, gold is expected to draw buyers if policymakers go for two rate cuts in September and December.
Gold slumped more than $100 and Silver tumbled 7%, falling the most in almost three years as surprise strength in a key US jobs report dashed hopes that the Federal Reserve will be able to start lowering interest rates soon. What next?
Click here for a detailed report…
Gold prices have rallied almost 18% from $2071 (~Rs 63200) at the start of 2024 to $2455 (~Rs 74500) on May 20, 2024. Now the question is, has gold rallied more legs to head higher or this rally is overdone?
Check out the report for more details..
Silver is making a move, greatly outperforming gold as it trades at an 11-year high to approach $31.85, following a comparatively modest start in the first quarter. Silver is following in the footsteps of gold and copper.
Due to worse-than-expected US initial unemployment claims data, which strengthens the case that central banks will soon be able to lower interest rates, gold has regained its positive momentum.
After this week’s price correction in Gold and Silver, oscillators are in the mid-zone now, after trading in the overbought zone for 20-25 days. As forecasted, Gold and Silver have seen healthy correction after a sharp run. Now further trends would be decided purely on the fundamentals, which are bullish.
